Proposal for Multiple Component Pricing in Southeast Withdrawn

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National All-Jersey has withdrawn their request  for a USDA-AMS Dairy Program FMMO Hearing to consider implementation of Multiple Component Pricing for the Southeast (FMMO 7) and Appalachian (FMMO 5) Milk Marketing Orders.
The withdrawal of this proposal culminates a process of several years of discussion and evaluations by producer groups and several dairy cooperatives on how Multiple Component Pricing in the Southeast might affect producer pay checks.
Following is the timeline of this spring’s events:
April 2, 2018: National All-Jersey submitted their 80-page proposal  requesting a hearing.
May 2, 2018:  USDA-AMS then posted an Action Plan.
May 16, 2018: An information session was held in Knoxville, in Knoxville, TN, which was coordinated by Tennessee and Kentucky Farm Bureaus.  The session was recorded in two parts, and each are available for viewing:
  • Part 1:  A 1 hr – 39 minute video recorded by TN Farm Bureau (Dana Coale, explaining FMMO process)
  • Part 2:  A 1 hr. 14  minute video recorded by TN Farm Bureau  (FMMO Administrators and officials explaining the specifics of the process leading to acceptance or denial of an MCP hearing)
June 1, 2018:  Two additional proposals were submitted to USDA-AMS:
  1. A  7-page request from Michael Brown, Director, Dairy Supply Chain for Kroger, stated: “We ask USDA to also include the a proposal to lower the minimum amount of Class I Sales required a distributing plant to achieve pooling status from 50% to 25%. “
  2. The Tennessee Dairy Producers Association, with Stan Butt as Executive Director, submitted a 16-page proposal in opposition to Multiple Component Pricing, with this opening statement:  “Opposition to the proposal submitted by NAJ to changing the current pricing structure in FMMOs 5&7 is based on the proposition that the majority of producers in both orders will be negatively affected.”
June 11, 2018:  A letter-to-the-editor written by John Harrison, Sweetwater Valley Farm in opposition to Multiple Component Pricing was posted by Progressive Dairyman.
June 28, 2018:  The letter withdrawing the Hearing request,  written by Erick Metzger, General Manager of National All-Jersey, posted at USDA-AMS – Dairy Program,  contains these statements:

 
“Marketing conditions in the Appalachian and Southeast Federal Order Marketing Areas are in a state of flux, aggravated by challenging national dairy product markets.
 
The proponents therefore withdraw their proposal for a multiple component pricing hearing in Orders 5 and 7 at this time.”
The letter closes with:
 “We anticipate resubmitting the proposal when the current marketing  challenges have stabilized and resources necessary to advance the proposal again become available.
Here is the letter in its entirety:
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All USDA-FMMO processes are directed and defined by a set of rules, including procedural rules.  It is up to farmers themselves – those most affected by FMMO rules and regulations – to learn the process, and to participate in the process. 
This spring, and the preceding years and months of information seeking, are an example of civil discourse which can occur.
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TN June Dairy Month: Kickoff Luncheon & Then 4-H at work!

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It’s ‘Raise A Glass’ Time in Tennessee!!

For several decades, the Tennessee June Dairy Month Kickoff has been the launch for events across the state highlighting Tennessee’s collective dairy industry.  The 2018 event was held at Battle Mountain Farm, the event venue of Hatcher Family Dairy Farm, College Grove, TN on May 30.  The rural setting, with Holsteins and Jerseys grazing in a nearby pasture, emphasized that tasty and nutritious dairy products truly do begin on a farm.

This event honors several aspects of Tennessee 4-H involvement in dairy related activities.  4-H County Chairmen, who conduct dairy promotion and awareness events across the state are recognized.  The Tennessee 4-H Dairy Quiz Bowl Finals are held. And always, an inspirational speaker brings life’s insights to 4-H’ers as they return home to begin June Dairy Month events.  Their activities allow them to compete for awards in several categories, which are presented at the next years events.

This year’s event was organized by Denise Jones, of The Dairy Alliance, who put the engaging tables and decor together and set a great dairy mood as folks entered the beautiful event venue.  She was assisted by Joan Benton and Cindy Cooper of The Dairy Alliance.

Following are some photo highlights of the event.

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Emma Mull, McMinn County, Grace Rich, Clay County, and Elizabeth Bright of Loudon County, are three of several County Dairy Month Chairs who have a full slate of activities planned.

You can follow Grace on Instagram as ‘udderlylegendairy,  Emma will be social on Facebook as McMinn County June Dairy Month, and Elizabeth Bright’s creative videos and spots are on Facebook at June Dairy Month – Loudon County.  Look for other social promotions and public activities from chairmen in your area of TN!

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Part of the setting front and center of the banquet hall, framing the dynamic Denise Jones, the event organizer, of The Dairy Alliance!  Did you know MILK is Tennessee’s Official Beverage?  It was given that designation in 2009 by the Tennessee Legislature.

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Three 4-H’ers, who will become future consumers, related how their participation both in Dairy Production Projects and Nutrition, Health, and Fitness projects, have made them appreciate dairy’s unparalleled nutritional benefits, along with the hard work of Tennessee farmers who produce that milk. Abigail Ferguson, Ashley Bell, and Kathryn Fellhoelter all gave great presentations.

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Marshall County is the winner of the Dairy Quiz Bowl Competition, and will be headed to the National Contest later this year.

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Some more of our Tennessee County 4-H Chairmen!  Do you know who the 4-H Dairy Chairman is in your county?

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Jeff Aiken, President of TN Farm Bureau, and a former dairy farmer himself, represented the organization as an event sponsor, and brought words of encouragement to those attending.  He was accompanied by many Farm Bureau staff members from across the state, as they came to support the TN June Kickoff event.

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Do You Know “What’s Your Why?”

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George Wilson, who retired from the Tennessee Titans after an NFL career with several teams, challenged the audience with the question “What’s Your Why?”  A two-time Walter Payton Man of the Year in the NFL, he inspired with point after point:

  1. Be the first to show up, and the last to leave. Be grueling, tough, and unrelenting in the pursuit of your dream!
  2. Be mindful of what you do and the choices you make, and of those whom you allow to make decisions for you.  [He began at an SEC school, Arkansas, on an academic scholarship, walked-on and made the football team, and then was able to receive a football scholarship because someone got arrested and lost the scholarship they had.  And that set the stage for his 11-year NFL career.]
  3. Sometimes in life, “Opportunity is Disguised as Hard Work!  [It took 15-16 years of hard work and sweat on the football field to finally get a starting position on an NFL team and an interception against the cowboys on national TV.]
  4. “I give of myself because others gave of themself to me.  THAT’S MY WHY! He prayed, “Lord, if you you allow my dream, I will give back.  And then noted, “that is a debt I’ll never repay!”
  5. Why does he care about Fuel Up to Play 60?  Because his thoughts were captured by this statement: “We could be raising the first generation of kids who won’t outlive their parents.  FUTP 60 puts power and decision-making in the hands of students who participate in the program.”

 

Celeste Blackburn, President of TN American Dairy Association, served as MC for the event, and gave Mr. Wilson an appreciation gift featuring some of Tennessee’s farmstead dairy products.

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At the event close, Jimmy Hopper, Assistant Commissioner of the TN Department of Agriculture overseeing TDA’s Consumer and Industry Services Division, was honored with the TN Outstanding Dairy Promoter Award. One of Hopper’s responsibilities was overseeing the Dairy Quality Division, charged with quality and safety on dairy farms and in milking barns, in processing plants, and addressing retail dairy sales outlets.  Jimmy went above and beyond a ‘job description’ to serve Tennessee’s dairy industry.  And he did it with class and respect for all he worked with. During his tenure, Tennessee’s first robotic milking barn was installed.

The Tennessee Cooperator has a great summary of Hopper’s career.

Always a man of humility, Hopper encouraged young folks present to find a dairy farmer and work with them for a while.  He noted there was no better role model for developing a work ethic that would serve one well throughout a career.

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McMinn & Loudon 4-H’ers Helped with a Milk Drive on World Milk Day!

Wasting no time getting started with June Dairy Month promotions, and in a way that serves others, the McMinn Co. 4-H Chairman, Emma Mull, and Loudon County’s Elizabeth Bright spent World Milk Day (June 1) helping Second Harvest in East TN at the Randy Davis Memorial Milk Drive. 

The event they participated in was held at Lenoir City, in Loudon County, Tennessee’s #1 Dairy County.   On that one night, in a 4-hour period, 1457 gallons of milk were purchased and loaded on a Second Harvest refrigerated truck, destined for distribution to neighbors in need in their 18-county East TN service area.

These annual events, held onsite with the cooperation of Ingles Groceries in East TN, encourage purchases of milk at the groceries for the purpose of distributing milk to hungry neighbors.  With their hands-on approach, the onsite drives encourage human-to-human connections in the spirit of giving back, and ignite a life-long spirit of being a benefactor to the community.

Customers coming in to the grocery stores can contribute in two ways:  they can make monetary contributions, which the Milk Drive Team uses to purchase milk from the store, or  they can purchase the milk themselves and bring to the waiting Second Harvest Refrigerated Truck.

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Tennessee Agriculture has had a very difficult spring in 2018, dealing with price and market challenges in all sectors of agriculture, Dairy included.

With future consumers enthusiastic and connecting with farmers and industry leaders present, the 2018 TN June Dairy Month Kickoff served as a happy occasion to remind us all in the TN Dairy Industry to reflect:

So, “What’s Your Why?”

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Dean Foods to close 7 plants in 2018; No additional producer letters expected soon

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(NOTE:  This is an evolving story affecting Dean Plants across the country.  Sources are a variety of public information and anonymous sources.  Updates will be made as warranted).

Dean Foods will be closing 7 processing plants in seven states in the next months, with the plants located in Kentucky, Georgia, Pennsylvania, Massachusetts, Illinois, Michigan and Minnesota.

News of the plant closings began to emerge through local news outlets in some of the cities involved through the day Tuesday, May 22nd, yet, at this posting, there are yet no official statements from Dean Foods corporate officials.

This announcement follows the jolting announcement in early March that over 100 farmers in 8 states, marketing milk as Dean Dairy Direct (independent producers, meaning not members of a co-op or marketing agency) producers, would have their contracts terminated as of May 31, 2018.  At this point, many of those farmers have found new markets, several elected to disperse their herds, with several still struggling to find a market and income source for their farm’s milk.

The navigation of stormy, wind-tossed oceans of milk in the overflowing worldwide dairy milkshed has led to the announcement that these processing plants will be shutting their doors during the late summer and fall.   Intense competition to find a processing market/plant for milk, exacerbated by declining milk consumption the world over, has converged in a perfect storm of farmers getting caught in the crosshairs with no markets for their milk, along with employees in processing plants losing their jobs as well.

Competition for the prime retail real estate of grocery store shelf space is also a factor in these events.

In the southeast, the two Dean Foods plant closures at Braselton, GA and Louisville, KY follow the early May announcement of the closure of a Fulton, Ky plant, owned by Prairie Farms.  In that event, processing operations will cease, but the facility will remain a distribution center, with 12 of 52 employees remaining.

An anonymous Dean Foods source says that “no more farmer/producer contract terminations via letters from Dean Foods are expected in the near future.”  However, we all know that increasing consumption of fluid milk is the quickest way to stabilize the future of all dairy farms across America.

The Dean plants said to be closed are:

  1. (News report: not initially confirmed by Deans)
  2. (News report: Member of founding family not bitter) 
  3. News report:  (Processes gallons & half-gallons, 120 employees)
  • Braselton, GA [Mayfield brand]   (2015 Dean’s CEO Quality Award Recipient)    (Visitors Center closed in 2014, reopened, Over 1 million folks a year to learn) (Reports from anonymous employees who received notices)
  • Louisville, KY    [Dean’s brand] News report link to WKYT) “That loss will cut production at the company’s Louisville plant, which will shut down.”

This announcement is only one in a series of cost-cutting measures Dean Foods has taken over the past several years.  A PET milk plant in Richmond, VA was closed in the fall of 2017.   In a Food Business News report of March 1, 2018, phrases such as “increasing competition,’ ‘6% decline in volume,’ and ‘reset cost structure,’  were signals more changes are to come.

The Louisville plant closure comes as no surprise, due to its distribution overlap into Indiana of retail centers to be served from the new Walmart milk processing plant opening in Fort Wayne, IN.  However, the opening of that Walmart plant has now been pushed to late summer, for a variety of reasons.  A recent report by Sherry Bunting, which appeared in the Farmers Exchange, features an interview with a Walmart spokesperson on that project’s status.

The closure of the Braselton, GA, Mayfield plant, may have come as a bit of surprise to some folks.  In 2016, this display in the Visitor’s Center relayed some stats which were current at that time, however, today’s employee count is closer to 150.  It is not known if this includes distribution networks.

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Dean Foods, as of an annual Dairy Foods (magazine) report, last published in the August 2017 edition, is the United States second largest milk processor, with Nestle being #1.

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As is common with any company treading in difficult waters, reports of a sale of the company, or of a merger and acquisition, are commonplace.  Sometimes they prove to be nothing, sometimes they prove to be true, and only time will tell which is the case with Dean’s.  It truly will be in the best interest of the United States dairy industry for the company to stabilize, due to the number of farms for which it provides a market, and for the number of employees in plants across the country.

The hardest truth of all of this is that ultimately, farmers in local regions, the rural economies that depend on a viable market for those farmers, and employees at plants, are the ones suffering the most from battles at all levels of the worldwide milkshed. 

Updates, and corrections if needed, will occur as more news becomes available.

 

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Multiple Component Pricing for FMMOs 5 & 7; A Meeting, Action Plan, Information

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Will Multiple Component Pricing be implemented in the Appalachian (FMMO 5)  and Southeast (FMMO 7) Milk Orders?
Multiple Component Pricing, a way to value milk at the farm level based on components found in milk (protein, butterfat, and other non-fat solids),  rather than the skim/butterfat pricing currently implemented, is on the table for the two geographically largest milk orders in the Southeast United States.
Florida and Arizona do not price milk based on MPC, and those areas are not included in this current request for change.
An April 2nd request for a hearing to evaluate the implementation of Multiple Component Pricing for Federal Milk Marketing Order 5 (Appalachian) and FMMO 7 (Southeast) was filed with USDA-AMS by National All-Jersey, Inc.  The 86-page document can be reviewed here.
A great article concisely summing up the request and important factors has been written by Dave Natzke of Progressive Dairyman; read his perspective at this link.
The Tennessee and Kentucky Farm Bureaus have joined together to host an information meeting before the request for Multiple Component Pricing is fully evaluated; A Federal Order Hearing on the matter is tentatively scheduled for July 30, 2018
This May 16th meeting provides producers with a means of direct contact with FMMO officials who can explain not only the MCP proposal, but milk market pricing in detail, and how producers’ milk checks are affected by various market factors.
The details about this FB Information meeting, scheduled for May 16th in Knoxville, TN, are:
What:  Meeting with Dana Coale, Deputy Administrator for USDA -AMS Dairy Programs, along with several officials of Market Administrator Offices in Federal Orders 5 & 7
For:  Any dairy farmer in Federal Milk Marketing Orders 5 & 7
Organizers:  Meeting has been organized by TN and KY Farm Bureau organizations
Several state Farm Bureaus have been involved in dairy farm matters in the past few months – please give them a THANK YOU!)
Date: Wednesday, May 16, Knoxville TN  11:00 am
Time:  Sandwich Lunch @ 11 am; Lunch begins promptly at Noon EDT
Where: University of TN Ag Campus, Hollingsworth Auditorium. Plant Sciences Bldg.
             2505 East J. Chapman Drive; Knoxville, TN  37996
For:  Any dairy farmer in Federal Milk Marketing Orders 5 & 7
Purpose:  To discuss current market procedures and proposed market changes
RSVP / Register by May 11th: 
        Roxann Sanders – Email at rsanders@tfbf.com – OR
                                      Phone at 931-388-7872, ext 2231

The Invitation Letter and Announcement:

Jeff Aiken, TN Farm Bureau President, and Mark Haney, Kentucky Farm Bureau President, co-authored this meeting invite, which was also mailed to dairy producers:
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The Meeting’s suggested agenda:

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Following the announcement of these Knoxville, TN meetings, USDA-AMS has posted an “Action Plan” with a proposed calendar of activity related to Multiple Component Pricing.  Please note additional proposals can be accepted until June 1st!
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Resources for Additional Consideration  (Highly suggested reading!!!):

Multiple Component Pricing (MCP) first began taking place in the Federal Order System in the Great Basin Milk Marketing Order in 1988.  [The Great Basin Order is referenced in this 2002 testimony to a Western Milk Marketing Order Hearing.]
Since that time, several orders have consolidated, but the great majority of the United States dairy producers are paid on a MCP basis.  At this time, this map generally defines the geographic locations of FMMOs across the United States, however, California was conducting a producer referendum, in which voting ended on May 5th to finalize entry into the Federal Order System:
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Producer groups in the southeast, including the Kentucky Dairy Development Council, the Georgia Milk Producers Association, and the North Carolina Dairy Producers, have endorsed a Multiple Component Pricing structure.  The Tennessee Dairy Producers Association is currently opposed (as of May 10th).
Each and every producer should take the time (and it may take a few hours) to evaluate Component Pricing and how it will affect your farm’s income in the future!  Isn’t your farm’s future worth that time?
AND – each producer is highly encouraged to attend the May 16th meeting in Knoxville to have a chance to ask direct questions to USDA-AMS officials.
Your future income depends on accurate information – please make the most of this meeting opportunity!
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Dairy Needs to Develop Wisdom – 1 gallon at a time!

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Go Time: National Milk Day 2018 – Change can begin: 1 gallon at a time.

On this National Milk Day 2018, the dairy industry needs wisdom more than it ever has, at any given time in history.
(Note – this is revised from an original posting late night on National Milk Day 2018.]

There’s one official #NationalMilkDay, but for many of us at the grassroots level of dairy, everyday is #MilkDay!  Some of us operate dairy farms, some are nutritionists for dairy farms, some service equipment and provide other supplies for dairy farms, some of us communicate about and with dairy farms. We Live Dairy, #WeLiveMilk, and we work long hours, because a cow’s clock never shuts off, and first and foremost, we take care of those cows, because they take care of us!

But right now, this dairy industry – beloved by many,  revered by some, and often illustrated with warm and fuzzy memes and pictures on social media –  is hurting badly.  With the warm and fuzzy memes, perhaps farmers ourselves are trying to convince each other it’s ‘not that bad.’
But it is.  It is really ‘that bad.’ The dairy industry – that ‘family farm’ dairy industry that sustains a lot of rural economies from the east to the west coast  – is threatened like never before.   Calm, sane, salt-of-the earth, they-would-do-anything-for-you folks are indicating an undercurrent of despair and concern  at a level greater than the 2008-2009 price crisis.  And if those farms are threatened – the industries that serve them in local ag economies – are threatened as well.
To get to a solution, the collective industry, along with consumers, is going to have to do two basic things:
a.)  First – admit that “IT REALLY IS THAT BAD,” and then
b.)  Each layer of this industry –  from farmers, to service personnel (nutritionists, agribusiness, etc),  to milk buyers (including co-ops), to processors (some independents, some owned by co-ops), to distributors, to retailers – is going to have to set aside the ‘me’ factor.  And when the ‘me factor’ is set aside, then each individual person in each layer is going to have to begin to ask itself – ‘what can I do to stop the bleeding, and then right the ship?’
And then the big thing – each individual is going to have to take action. A lot of action. Likely with some sacrifice. We’ll get to that, although it may take a few blog posts to get there. (Patience, please!)
Many farms are operating at unsustainable financial levels, and it’s only a matter of time before the equity runs out, the loans quit coming, the market improves, or they are forced to go out of business.  It is, very unfortunately, a race to the empty barns. Many local and regional industry participants are predicting there’s going to be a massive exit of ‘family’ farms (for the purposes of this post,  I’m speaking of of 200 cows or less, and I will even include 500-700 cow herds in that mix) in the next 6-8 months.
Pride prevents many farmers from talking about how bad it really is at the farm level, but make no mistake – there are more hurting than are doing well at the moment. And most are too busy taking care of cows to do anything about the huge problem.
For every type of occupation or career with ‘dairy,’  jobs or farm businesses and ways of life are threatened by a myriad of factors right now, with these two factors the main ones
(in a very simplified description):

1.) There’s a world-wide glut of inventories of milk powder and cheese, compounded by overproduction as each individual farm around the world tries to generate enough milk to help pay bills in any given week.  Dairy is a supply-and-demand business first and foremost, and there’s a world oversupply, which reduces prices received by farmers around the world.

While we often are seen as ‘feeding the world,’ the ‘world’ is eating a lot of local farm finances, and farm futures, more than at any other time in history. 
To get rid of inventories, sellers on the big world markets are undercutting each other every day, frequently with prices at unsustainable levels as they make their way back to the farmer. Again, it’s a global marketplace – a very competitive, very cutthroat marketplace.
The general thought in this big-picture world of supply and demand is that ‘making no money’ would encourage folks to sell out, get milk and cows off the market, and exit the dairy business.  But again, dairy farmers historically have an infamous internal grittiness that allows them to withstand situations, sometime to the point of financial extremes.  I’m not saying that’s smart, I’m saying that’s the grittiness of a dairy farmer.
b.) Costs such as equipment and labor are continually going up, and farms are difficult, if not impossible, to operate without either.   Even ‘family’ labor needs to pay itself. Thus, the squeeze – the squeeze that’s sucking the life out of local farms, and the local, rural communities in which they are located.
Each of these two factors are complicated with a number of other intertwined layers, but those are the highpoints right now. I’ll stop there, because otherwise, a book as long as War and Peace could be written.
The problem of ‘hurt’ is compounded by plant-beverage marketers belittling real milk and presenting false info to an urban social media audience who seemingly would rather drink in the questionable misinfo and half-truths presented by 99% of ‘faux milk’ companies. Gullible consumers have sucked up that fearmongering and misinfo.  I have no answer for that at the moment.
However, that plant-based market is said to be worth over $16 Billion in the coming year. If 75% of that used to be dollars received by dairy farmers, then that’s $12 Billion (a guesstimate) that has been pulled from dairy farmer pockets. Along with that, think about the miles of retail shelf space  that used to be occupied by Real Milk, and which consumers would pull that milk because it was there.
A solution starts with a very simple action: 
Buy fluid milk.
Real Milk, from Real Cows.
NOT faux milk.
NOT nut beverages.
NOT plant extract milk.
But REAL MILK, from REAL COWS.
WHOLE MILK is BETTER.
You can drink it yourself, you can donate it to a food pantry, you can feed it to your cats, or take a milk bath. (10 gallons of milk for silky skin – now there’s a thought!)
Those of you who follow me on Twitter (@foodsheds) and Facebook know that I often post about drinking real milk, and a lot of times from local farms that I know. After all, they’re the ones in my local agri-economy, and just as much I want my own family’s farm to survive, it is critical for others in my local agri-economy to survive, too.
Why, you may ask? I would really like for consumers to learn about milk brands and dairy products that support farmers in each’s own ‘local’ area, and then help neighbors in each local area, first. Getting local milk off of local shelves can be a demand-increaser and supply-mover in your area.
That’s a market signal, and that drives milk sales. If you support your local farming communities, you help support your own local ag economies, and help protect the means for food security, close to you.  A sea-change of items will have to occur, but legislation and innovative new markets each take a lot of time, and we are running out of time.  A market signal such as milk flying off shelves is the quickest way to begin sending money back into farmer’s products.
Most farmers worth their salt don’t want something handed to them, but rather, they want to earn it – EF Hutton style. Each succeeding farm generation should feel this way, too.
Farmers in general kind of like the risk and the challenge, (or else they wouldn’t be farming at all), but they prefer risk that’s on a bit more of a manageable level than the farm economy is at the moment. Rather than comfort, they would like comfortable risk. (granted, a bit of an oxymoron)
Why should a consumer care about dairy farmers – or farms at all – on National Milk Day, and on any of the other 364 days in a year?
I’ll tackle that on a deeper level in the future (another War and Peace length piece), but for right now, here’s the short version: those nearby local farms are your children’s and grandchildren’s best bet for food security 50 and 75 years from now. That food security will serve society best when it’s in the hands of a a multitude of local farms, instead of huge Amazon-style corporate farms far, far away.
And if something doesn’t change, your ‘local’ farms will be a thing of the past, in the not-too-distant future, and those Amazon-size and Amazon-style farms will prevail.  A lot of flavor we treasure in local cultures will dry up.  Milk (or any other foodstuff), may or may not be ‘cheaper,’ but at what cost to society as we lose local rural communities?
Make no mistake – that’s the path we’re on. And a war to save local family farms has got to start. Now.  Absorb that for a bit (or a few days).
That said, I’m going to have myself a glass of local milk for a nightcap. Mayfield, Weigel’s, and Laura Lynn (bottled by Ingle’s)  are all in my fridge at the moment – it will be one of those! Borden and Sealtest (also bottled by Ingle’s)  could also be considered local for me (farms in a 150-175 mile range of my East TN location.)
In the upper southeast – Prairie Farms counts for local, but it’s very local in the upper midwest (Indiana to Iowa, up into WI).  As you approach the Gulf, look for Publix, and some Kroger milk in Georgia area Kroger stores. Through the Carolinas up into Maryland,  Maola and Pet are good bets. As you head up the East Coast and into NY and Pennsylvania, the brands will differ – we’ll try to work with some other dairy folks, find those brands,  and list them in the future.
The brands of ‘local’ will again be different where you live in the midwest or west coast or  make a point to ask ‘where the farms are?” that are found in a carton or wrapper of any dairy product.  And be warned – many national retail chains use the word ‘local’ in a very loosey-goosey fashion.  “Local”  to where, and “Local”  ‘how?’ is never defined, and is meaningless, particularly when it comes to dairy. Don’t take their word for it.
Please join me in prayers for Providential Wisdom for the Dairy Industry.  This is originally posted as National Milk Day approaches midnight,and the verse Matthew 25:40 keeps repeating itself:  “Whatever you did for the least of these brothers and sisters of mine, you did for me.”   If we as a society are judged by how we treat the smaller and mid-size farms, how will we measure up?
I have no answers for the long term, and indeed there are many answers, but we can start with ‘one’ – one neighbor in a city to one neighbor on a local farm, and a purchase of one (or two!) gallons of milk. Pray with me. Drink Milk with me. Develop in Milk Wisdom with me!
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Pumpkins For Sale in East Tennessee!

Got pumpkins?  Well, this farm does!  And they are for sale!

This year, Grahaven: The Graham Farm, located in the foothills of the Smoky Mountains near Newport, Tennessee, has grown pumpkins.  Traditionally, this has been a row-crop operation growing corn and soybeans, but this pumpkin project is a means to diversify our crop mix a bit.

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To get started, we’ve kept it simple:  two varieties of Jack-O-Lantern Style, Aladdin and Kratos, and Big Macs, the larger, decorative pumpkins which make a big splash in yards, on porches, and in those beautiful fall displays that just make folks happy!

We’ve enjoyed watching them grow, and seeing lovely scenes like this:

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But the time has come for these lovely orange bright spots of happy glowing orange to find new homes in yards and on porches everywhere!  So – we’re hoping you give us a try!

These pumpkins are available in WHOLESALE lots:

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QUALITY?  We’ve been testing their quality a bit, and we know some of the first ones pulled (first week of September) are good three weeks plus later!  (this posted on Sept. 26, 2017).  They’ve been out in the sun, on a glass-top patio table, and have yet to show any wear at all!

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The pumpkins have been grown under the watchful eye of farm personnel, along with frequent visits by qualified agronomists providing advice on pumpkin fertilization and stewardship.

In addition to the Jack-style pumpkins, we’ve got some of those lovely large Big Macs – just thing for huge yard or business displays!  These are great for pumpkin-scaping everywhere!

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As time goes on, we’ll share more about the pumpkin project and how it has evolved.  We are evaluating if this will be on ongoing crop, or a short termer – many factors will play into that decision.

There might (notice the ‘might’) be an on-farm pick-your-own event a bit later in October.  [October 21st, likely, if it happens – so ‘sort of’ save that date!].

In the meantime, for current updates, please follow us at our Facebook page!

You’ll know you’ve found us when you see this Facebook PROFILE Pic:

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And this is our Facebook Cover page:

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And lastly, a BIG THANK YOU to the many family members, friends, neighbors, farm associates, agronomists, and customers who have helped pick pumpkins and get this thing started!  (You’ll hear more about them later, too!)

Most of these posts on this blog deal with issues or event related to the worldwide Milkshed, but since my personal milkshed began with a family dairy farm, and the family farm is now growing pumpkins, and since pumpkin season is now upon us – well you get the picture!

Please – share the word there’s some pretty decent pumpkins that can be bought in East Tennessee!   Wholesale price lists are available on request.  Please call 423-797-1853 for more information.  Please come by!

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Dean Foods Earnings Report Q2 2017 – A Grassroots Perspective: Staying Calm, Placing in Context

Markets have Ups, and Markets have Downs. This challenging Dairy Industry climate led to an expected ‘down’ report for Dean Foods.  Stay Calm.

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On Tuesday, August 8, 2017, Dean Foods hosted their Earnings Call for the 2nd Quarter of their 2017 Fiscal Year.  This Call came in conjunction with the release of their Earnings Report for Q2 2017, and provided additional comments and insight into the numbers provided on the Financial Balance sheets, found in the Earnings Report.

Since then, a number of media reports have followed, some acknowledging that Dean is only one of several dairy focused businesses experiencing tough times in the overall dairy climate from farm to retail, while others are shouting ‘gloom and doom.’  The truth is somewhere in between all of that – each commentator brings their own perspective, and many of the widely available public reports are compiled from a financial sector view looking at numbers only, with few having a working knowledge of the complete dairy industry.  Because they deal with ‘big markets,’ a  lot of fortunes are made or lost on innuendo and incomplete information and rumors – emotions drive those markets up, and they drive those markets down.

Dean Foods Earnings Reports are of extreme importance to dairy farming communities across the United States –  Dean processing plants are the income source for farms in those areas because they buy milk from those farmers, and the plants provide a significant amount of jobs in those local economies.

My perspective is that of one who is involved in agribusiness and farming on this basic grass roots level.  Added to that, on one bleak February several years ago, I (and many other regional farm neighbors) was told my milk company had filed bankruptcy, and there would be no more checks from them.  My colleagues and I live, work and operate farms in the communities who benefit from the success of Dean Foods. We might stress a bit at times like this, but we don’t ‘freak out and panic.”   I know farms of all sizes who sell their milk to Dean Foods plants, I have friends whose jobs are at Dean Foods plants.  We have seen Dean Foods (and some of its predecessors) experience good times and bad, and we know there will be those market ups and downs.

Because of that grass-roots perspective and life experience, I often listen to those Earnings Calls.  Because I listened to the call the other day, as well reviewed the financial reports, and because I keep up with Dean news on a regular basis,  I would say “Stay Calm, let the flurry settle. Look at the entire matter in a complete context.”   Here’s why:

No doubt, the Dean Foods report was disappointing – the net profit dropped 45% from the same quarter as last year, resulting in lowered earnings per share that will be paid to stockholders.  Repeat – dividends will still be paid, there is not a loss, only the amount of dividend paid to shareholders will not be as much.

In today’s downright brutally competitive climate of the dairy industry from farmgate to retail shelf, those results were not entirely unexpected.  Stock prices went down 20% from the $15 level on the day before, and are currently trading in the $11.50 – $12.25 range (August 10).   These prices are nowhere near the 2010 lows, when Dean stock traded as low as $7 as another price war / oversupply situation taking place, albeit for different reasons.

In fact, just a couple of days before the call, and in anticipation of lowered earnings reports, one analyst suggested this was a cycle of “Contrarian Opportunity,” and could indeed be a time to consider buying Dean Stock.  This analyst continues:  “Milk will always be a staple of the U.S. consumer.  The fact that these concerns really only exist  [price wars, market variables] in the short term are reason enough to believe that demand for Dean Foods’ products is sustainable long term.”

Ralph Scozzafava, Dean Foods CEO,  was forthright with his assessment:  “We are not satisfied with our performance, and we are determined to improve our execution,” he said on the call.

Indeed, there is one positive spot already glimmering:  on the call, Chris Bellairs, Chief Financial Officer, revealed that a major private-label contract has been recently signed, but that results from those sales would not show up until a future Earnings Reports, said to be in 2018.  The new contract was not identified by name.

Dairy Reporter offered this balanced evaluation – not sensationalistic, but realistic and factual.

The real truth of the situation is somewhere in between the positives and negatives, and perspective and balance must be kept.  The ultimate focus should be on those who depend most closely on a sound Dean Foods: the farms and dairy farm families who supply Dean with raw milk, and the communities where Dean processing plants and jobs are located.

The extended multiplier effect of financial loss in those communities could be comparable to an area losing a large brick-and-mortar industrial plant, however, because the individuals and farms are so scattered, there is not quite the uproar as when a singular factory closes.  To prevent the potential (note – POTENTIAL) closing of some of those milk plants, it would be helpful if regional retailers decide that community neighbors are as important as ‘cheap’ milk, and make sure private label milks stay in the Dean plants.  Some might, some won’t.

Ultimately, behind every milk carton, there are the faces of farm families, generational farms, and local communities who produce that product.  The way  a consumer spends dollars affects those farms and processing plant jobs – some of them may be your neighbors.

From the Southeast to the Northeast to the West Coast, there are dairy farm communities and local ag economies who are far better served when Dean Foods is financially healthy.    Oh, and there are those stockholders, who do expect a return for their ownership shares – they will have a say as well.

Phil Lempert, also known as ‘The Supermarket Guru,’ penned an article for Forbes entitled “Walmart Moves into the Dairy Business Even as Milk Consumption Drops.”  When you get into the text of the piece, Lempert uses the Dean report to discuss not only the Walmart milk plant currently under construction, but the challenges facing the dairy industry as a whole.  This article has been shared widely on the internet and social media.

However, ‘there’s more to the story’ than the information in Lempert’s article:

Lempert asks the right questions about Walmart – but Dean Foods will be far from the only one affected. I generally like the Guru and his food news, but in my opinion, his observations in this piece are a bit shortsighted, and fail to provide a complete picture or broader perspective on Dean activity in the past several months. To wit:

When the Walmart plans for a plant were announced in 2016, Dean began making adjustments then to allow for that.  It was revealed on the call that when the Walmart plant begins operations, milk currently being processed at Dean-owned plants for Wal-Mart will decrease by 90-95 million pounds of milk over 2018 and 2019.  To make up for that loss,  they have been broadening their product portfolio, acquiring companies who are not as dependent on fluid milk.  As a large corporation, doing BIG business, it takes time to make for those adjustments, which has occurred and is occurring since that announcement.

As noted earlier, there was the announcement that Dean has  just signed that major private label contract (no name provided).  And just because it happens all the time with any milk company, no doubt Dean will be trying to gain business from other milk labels as well.

There is still a $45 million profit for the quarter (the way those numbers are computed by huge corporations, and in keeping with SEC accounting standards).  And while not as much as last year’s comparisons for the same quarter, profits still occurred in the form of  “adjusted diluted earnings per share.”  Additionally, there was still ‘net cash’ and not ‘LOSS of cash.’

Dean stated last winter, in another earnings report situation, when asked directly about how they would deal with a Walmart plant, that they had already withstood the challenge of losing some Walmart business, so they were a bit more prepared to deal with this occurrence, therefore they have been taking the actions mentioned above.

With all that said, these realities remain: Dean Foods is still one of the largest supporters of LOCAL dairy communities because they do generally source from farmers within a 200 mile radius of their plants. Dean Foods sources that milk through both independent producers and co-ops, bringing on this question: WHAT is each and every handler doing to stabilize and protect the financial integrity of the farms it represents?

No doubt, some of those handlers or co-ops may be evaluating and seeking contracts with the Walmart plant, but with Walmart’s known predatory practice of enticing vendors and then squeezing the crap out of them, how will that be good for any producer in the long term?

And on the flip side – how many of us continually shop in a Walmart with big-spending shopping trips, when by doing so, we are feeding that very greedy, corporate pig which has sucked the life out of our small downtowns and communities, and is now headed on a path to do that to family farms? [Keep in mind – those farms are our future food bank or food savings account – what happens to your children in 75 years when they are gone?}

‘Wally World’ is going to take on new meaning, and will exist far beyond the walls of any singular Walmart brick-and-mortar retail box.

What next?  As for me, I’m headed to get some Trumoo Whole Chocolate Milk (NOT at a Walmart), and plan on buying some Dean stock in the next couple of days.

 

Additional information can be found at:

USA Today article: 

“As milk production continues to grow across many areas of the country, we’re seeing surplus volume . . . and aggressive pricing that we believe just isn’t sustainable long term.”  a quote from Ralph Scozzafava, Dean Foods CEO.

“Dean Foods also will focus more on expanding in food categories that deliver higher profit margins than milk, such as ice cream.”

Benzinga article:  (published a week prior to earnings report):

[Dean Food’s Caught in Crossfire of Walmart, Kroger’s ‘Price War’]  Milk is being used as a loss leader in many locations, compounding price wars.

From “Food Dive”: Notes These factors: the use of milk as a loss leader in some retailers, the competition from plant-based beverages, but yet notes that Dean’s volume loss mirrored USDA figures.

Earnings Report and Recording of Call:  For readers who wish to read the earnings report in its entirety, as well as take an hour to listen to a recording of the Earnings call, you can find links at the “Investor Relations” page of the Dean Foods website.

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